Chronic injury to the liver leads to the development of liver fibrosis. This disease is marked by the activation of hepatic stellate cells (HSCs) into myo-fibroblast like cells that over-produce transforming growth factor beta-1 (TGF-beta1), a key fibrogenic cytokine, causing excessive collagen accumulation. Concentrated regions of activated HSCs lead to the formation of alpha-SMA and Collagen-rich fibrotic foci that lead to the deregulation of liver homeostasis resulting in fibrosis. Hepatocyte growth factor (HGF) as an anti-fibrotic therapy has been actively researched upon, but it is not yet available in the clinics due to the risk of hepatocarcinogenesis from non-specific uptake during untargeted therapy and the need for a better understanding of its anti-fibrotic role. This study reveals a novel mechanism by which HGF regulates the activation of TGF-beta1 and thereby controls fibrosis progression in HSC-T6 monocultures and fibrotic co-cultures of hepatocytes and HSC-T6 cells. Further a robust and safe method was developed to deliver HGF specifically to the HSC-rich fibrotic foci in DMN-induced fibrotic rat livers. HGF transgene was encapsulated in Vitamin A-coupled liposomes to enhance their uptake by retinol-receptors-rich HSCs; and delivered via retrograde intrabiliary infusion to bypass the capillarized hepatic sinusoids and enhance the transgene delivery to the fibrotic liver. Such targeted delivery of HGF transgene compared to untargeted delivery lead to an effective control of alpha-SMA and Collagen levels. Thus this study demonstrated that HGF can restore liver homeostasis by inhibiting the excessive TGF-beta1 activation pathway and when HGF gene is targeted specifically to the fibrotic foci, it can lead to an effective regression of liver fibrosis.